What happens when you get a low home appraisal?

What happens when an appraisal comes in low, and it threatens to affect your real estate transaction? That’s the question I’ll answer in today’s video blog. There are lots of people involved in a real estate transaction, and when an appraisal comes in low, almost everyone gets involved

With prices increasing in our market, low appraisals are actually quite common. Whether or not there was an appraisal contingency clause will matter too.

There are a few options to rectify this situation. The most common (and most effective) involves the buyer and seller coming back to the table to renegotiate the deal. To find out more, watch this short video.

0:00 Introduction

0:15 Appraisal is lower that the purchase price- now what?

0:59 The Limitations on the Appraiser

1:13 Next steps to a low appraisal- double check it- errors and Rebuttals

1:39 Buyer and Seller Renegotiation

1:50 The Appraisal Contingency

2:00 Loan options

2:39 When Buyer and Seller can’t agree- Contract cancellation

2:50 Special cases need specific advice

Next steps for the buyer and seller

There are a few things that could happen. Firstly, the seller and buyer may want to to renegotiate the price of the home. This is because the home is now worth less than what was originally agreed upon. Another option is for the buyer to back out of the deal entirely. This is because they are not willing, or can’t, pay the full price for the home. This is rarely the situation the buyer wants to be faced with. Lastly, the seller could try to find another buyer.

When looking at homes, know that not all upgrades automatically add VALUE. One example is solar panels.

Your real estate agent will be a great resource in helping you determine the best course of action to take if your home appraisal comes in low.